WAU! MAS reinstated “UNPROFITABLE” Dubai route!

On 9-7-2013 En Ahmad Jauhari Yahya (AJ), the CEO of MAS, has made an announcement that beside the additional route to Darwin, MAS will be reinstating the Dubai route on 1-9-2013, in HERE.

Was the above sudden announcement by AJ a relief to MAS staffs?

Most probably not because the MAS union, MASEU, spoke up against the management of MAS. On 18-7-2013 the Malaysia Airlines System Employees Union (Maseu) has called on the government to intervene in the administration of Malaysia Airlines System (MAS) by appointing new leaders in the airline industry to head the national airline, HERE.

On 5-7-2013 Mr Ignatious Ong, the CEO of Firefly, has also announced that Firefly will be taking delivery of another 20 aircraft from now to 2016. This was not in line with what had happened after the MAS-AirAsia share swap. See the press cutting below.

Firefly bought more aircraft. Firefly has carried 1.7 passengers

These decisions must have came as a big surprise not only to MAS and Firefly staffs but also the supporters of our national airline, MAS and its subsidiary Firefly. The said decisions had to be part of another “Turn Around Plan” No: ???? or “Spin Around”.

The background of the way in which MAS terminated Dubai and other routes, and Firefly terminated international and domestic routes had to be revisited in order to appreciate the why there were endless “Turn Around Plans”.

Every so-called “Turn Around Plan” cost huge sum of tax payers’ money and time to MAS.

For a quick example, MAS Dubai office had to be re-opened, embarked on new promotion exercise, recruiting of new staff and etc. The same for Firefly. MAS must have a proper in-dept study before rolling out its new “Turn around Plans”, which will only add to LEAKAGES.

We have heard from the top management of MAS on too many occasions about plugging leakages. One of the obvious is the 25 years one sided catering contract with LSG Skychef Brahim’s Sdn Bhd.

BRIEF BACKGROUND OF THE “TURN AROUND PLANS”

Tan Sri Nor Mohamed Yakop, the then very powerful Minister of Finance II.

First and foremost, during the era of the then very powerful Minister of Finance II, Tan Sri Nor Mohamed Yakop, under the administration of Tun Abdullah Badawi, MAS was supposed to have been “saved” by the special “Turn Around Plans” known as the infamous “Wide Asset Un-Bundling” aka WAU, which was introduced in 2002 by none other than BinaFikir Sdn Bhd.

In 2008 Maybank was so impressed with the superb performance of BinaFikir that it bought BinaFikir, a consultant firm of 6 years standing, for RM8 million!

Tan Sri Nor Mohamed Yakop has been in the limelight in the blogsphere of late. Please read HERE.

After signing the infamous MAS-AirAsia share swap on 9-8-2011. From left: Datuk Kamarudin Meranun of AirAsia, Tan Sri Azman Mokhtar, MD of Khazanah, Tan Sri Md Nor Yusuf, chairman of MAS, Tan Sri Tony Fernandes of AirAsia, En Mohamed Rashdan, the then Deputy CEO of MAS, and Dato’ Nazir Razak, the CEO of CIMB. They were seen smiling away for they have achieved in the corporate eercise.

On 9-8-2011 Amok, the ex-BinaFikir founder together with Rashdan, made the sudden announcement that MAS-AirAsia to enter into a “Share Swap” agreement and the “Comprehensive Collaborative Framework” (CCF) which was purportedly to help MAS to “turn around”!

The said share swap did turn MAS upside down! Prior to 9-8-2011 no media knew about the said share swap except the news portal, The MalaysianInsider, which published a scoped story with clinical accuracy. We all should know why only the MalaysianInsider had the advanced story. Please read HERE, HERE.

The said share swap almost killed MAS with a stroke of a pen. If not for the YAB PM Datuk Seri Najib’s intervention, MAS would have been history. Incidentally, Dr Mohamadon Abdullah aka Dr Don has described the said share swap as a“National Tragedy”. Of course, this was said when he was not appointed as a director of MAS. Please read HERE.

A few days after 9-8-2011 we saw the sudden resignation of MAS CEO, YM Tengku Azmil. After YM Tengku Azmil’s resignation, MAS managed by the special EXCO.

The members of the EXCO were, of course, Tan Sri Tony Fernandes, Datuk Kamarudin Meranun both from AirAsia, and the BinaFikir’s whiz kid, Rashdan, the Khazanah‘s nominee.

Within a short span of about 1 month 16 days (from 9-8-2011 to 25-9-2011) the said EXCO was running “amok” in MAS. MAS was managed as though it was a privately owned company!

The EXCO was finally disbanded after En Ahmadd Jauhari Yahya (AJ) was appointed as CEO of MAS on 26-9-2011.

After the MAS-AirAsia share swap was sealed on 9-8-2011

Right: En Mohamed Rashdan Yusuf, the then Deputy CEO of MAS, a nominee of Khazanah and co-founder of BinaFikir Sdn Bhd

In September 2011, Rashdan rushed to London to sign MAS sponsorship of QPR Football Club. The majority shareholder of QPR is Tan Sri Tony Fernandes. MAS sponsored the QPR jersey for home game only for two years. This sponsorship was signed when MAS was, of course, BLEEDING. It cost MAS almost RM9 million a year in HERE.

At the material time, several decisions that were detrimental to MAS and Firefly were made:

Unilaterally cancelled numerous full load flights of Firefly during Hari Raya season recently thereby causing great inconveniences to the rakyat during festive occasion;

Termination of profitable Firefly routes from Johor Baru to Kuching and Kota Kinabalu from 15 September 2011 also causing great inconvenience to the rakyat, who had to travel to KL to board the flights – not sure whether MAS or AirAsia flight;

To change the name Firefly to Sapphire when Firefly is doing extremely well and expanding; and

MAS signed Jersey Sponsorship Agreement with QPR, which Tony bought a few days after the secret share swap was sealed, when MAS was supposed to be ailing very badly financially.

Mr Connor McCarthy, the Chairman of PlaneConsult and director of AirAsia.

In January 2012, the consulting firm PlaneConsult was appointed by MAS. PlaneConsult has no experience in full service airline like MAS. Its experience centered around low cost airline.

Mr Connor McCarthy, an Irish man, is the chairman of PlaneConsult and he is also a director of AirAsia. Both AJ and Rashdan jointly appointed PlaneConsult as the consultant of MAS from 16-1-2012 to 30-4-2012, in HERE.

PlaneConsult was also the consultant of AirAsia, the key man in PlaneConsult is Mr Connor McCarthy, who is also a director of AirAsia. Read HERE.

Shane Nollan of PlaneConsult was appointed in November 2011 to be the Director of Sale for MAS, HERE.

Shane Nollan was helping MAS by ripping off the Malaysian Government in HERE.

The announcement of New Business Plan of MAS where the top management of MAS was in great pain to justify the termination of several profitable routes like KL/ Dubai, KL/Bnadung, KL/Surabaya and etc in HERE.

After the termination of Bandung flight, AirAsia increased its to twice daily. Emirate increase its daily flight from 2 to 3 with the introduction of its A380 and from 3 to 4 daily.

When the top management of MAS terminated the Dubai route, rumour has it that AirAsia X applied to Dubai authority for it but it was rejected as Dubai authority did not want low cost airline to spoil the image of its airport. If this was true then AirAsia X and/or Tan Sri Tony Fernandes should thank AJ and the other members of the top management of MAS for all the kind helps rendered.

On 23-11-2012 Tan Sri Azman Mokhtar of Khazanah and 29-11-2013 AJ briefed the Public Account Committee (PAC) in Parliament House where AJ told PAC that Firefly was losing RM89 millionHERE & HERE.

It must be reminded that the government had reserved an additional KL/Sydney route for MAS for the period 2012 to 2013. For reason best known to the top management of MAS, MAS gave up the KL/Sydney/KL route to, of course, AirAsia X. Will we be hearing soon that top management of MAS will be asking the Government for an additional route for the profitable KL/Sydney/KL route? May be this will be included in the next “Turn Around Plan” of MAS!

Was it not too late for the top management of MAS to reinstate Dubai route when Emirate has already stepped its frequencies for KL/Dubai/KL routes from 2 to 3 and then 4 daily?

When Dubai and other and other routes were cancelled by MAS and Firefly, who was top management of MAS wanted to help?

12 Responses

The Nor Yakop / Tingkat Empat lots are still flying high every where. Khazanah, Maybank Investment, from Maybank to Cabinet and others to name a few. We must carry on to expose them until they realize that there is no room for their bullshit. Thank you YB for doing the job for us.

Is AJ the CEO of MAS? Why was he taking instructions from the Pariah? YB you have forgotten to put a link where announcement of the ferrying agreement with AirAsia X was made at midnight and of course, the scandalous fare charged to AAX for a KL/London was RM111! Only the brainless CEO will agree to such a rate. AJ contract is coming to an end in 2014 and he is warming his seat and draw his salary otherwise he wouldn’t be making those stupid decisions during the share swap and to reverse them now.

dubai-kl route is profitable i.e. arabs/visitors still throng and come to kl via dubai. but, not via mh vis-a-vis even since before mh terminated kul-dubai flights, people already chose emirates and etihad over mh. emirates/etihad offer better price, way better aircraft, wayyy better in-flight and traveling experience i.e. how would the arabs allow themselves to be cramped inside mh’s small economy seats, among other things

WOW WAU, you nailed this one. Great chronicle on MAS (read Malaysians) being cheated big time. Absolutely no rehab for stupidity. Thank you YB for your perseverance. If the Govt is smart, they should put you as MOT.

“The background of the way in which MAS terminated Dubai and other routes, and Firefly terminated international and domestic routes had to be revisited in order to appreciate the why there were endless “Turn Around Plans”.

Every so-called “Turn Around Plan” cost huge sum of tax payers’ money and time to MAS.”

AJ was led by the nose by his good friends Danny and Tony. May be the experts in Khazanah also told him what he should do. The decisions that he had made during the share suap were ill advised and thoughtless on AJ’s parts. MAS is suffering.

Three main stupid decisions:

1. Accommodating AirAsia X passengers at below cost fares,

2. Giving up the profitable Sydney route to AirAsia X,

3. wnet along with the decision to scale down Firefly operations.

How silly can a CEO be. No CEO would agree to such stupid decisions. Good luck to you AJ. 2014 is at the corner. You can forget about your Business Plans.

You better check on the Botak with regards to the maintenance contract with AirAsia. MAS DOES NOT NEED ANOTHER ONE SIDED CONTRACT LIKE THE 25 YEARS CATERING CONTRACT THAT COST MAS RM300 MILLION A YEAR.

AJ looks like an idiot in the press cutting. He terminated the Dubai, Italy/Rome and other routes a year or so ago based on unprofitable. The same for Firefly. Now he is doing the reverse. Not fit to be the CEO.

If you analyse the traffic loads, there are more flights between Dubai and Singapore than there are between Dubai and KL?

It’s a matter of flight frequencies and international connectivities.

On the “Kangaroo route”, why would passengers choose to transit via KLIA when they can do so via Changi or Dubai?

And for passengers from the UK or Europe heading for Asian destinations, there are plenty of direct flights from London or other European cities or from Dubai which is the main Emirates hub. Emirates can also fly passengers from Dubai and other Middle East and African cities to Singapore where they can connect to onward flights to destinations in Asia and Australia.

So, what exactly is the “game changer” that MAS has in reinstating the KL-Dubai route?

And KL is not exactly a “must visit” destination for passengers from the UK, Europe, the Middle East and Africa, is it? Unlike, say, Bangkok, Hong Kong or Singapore.

I think that this will be just another expensive miscalculation by MAS.

It should just accept the fact that airlines like Emirates and SIA have passed it and left it in the dust, no thanks to multiple crises and bail outs.